Cattle Prices

There has been much discussion in recent months about the improvement in cattle prices for Australian producers.  The price improvement in late 2015 has certainly been most welcome and reverses the trend of a number of years of very poor returns for cattle producers. 

It is interesting to consider how good the price rises have been.  The chart below shows cattle prices in nominal terms and also real or inflation adjusted terms.  The data shows a slight improvement in prices over time in nominal terms.  However, price rises have not kept up with the inflation rate, demonstrated by the steady decline in saleyard prices in real terms. 

Despite the recent price rises, cattle prices are still approximately 25% lower in real terms than those prevailing in 1980. 

Figure 1:  Average Australian Saleyard Price for Yearling, c/kg.  

Source:  ABARES, Commodity Statistical Bulletin 2015. 

Since 1994, average weekly earnings in Australia have risen by approximately 130% in nominal terms.  Cattle prices referred to in the chart above rose by only 30% in the twenty years between 1994 and 2014 in nominal terms.  The price rises in 2015 have meant that prices have risen by about 80% since 1994, still considerably less than wage rises. 

FURTHER READING

Australian Bureau of Statistics (2015)  6302.0 Average Weekly Earnings, Australia.